Maximize401k's  Instablog

I will provide one stock pick for this week despite the market being in "rally-back" mode (see chart below).   So far, there is an overhead resistance wick up through the 50% retracement level and the 61.8% retracement level is near the median line (sloping up red line).

Here is the so-called "stock pick."  It is Abovenet Inc (ABVT), a telecommunications company.  The chart indicates some choppiness, but it does have a "support wick" down through the 50 day moving average (red line), which is also an "attempted sell-off with no result."   This stock also exhibited good relative performance, having not pulled back as drastically as the rest of the overall market.



Finally, the updated model portfolio is posted below.  BPOP has been removed, but I have left the remainder.  As you can see, the natural resource stocks have done very well, especially HL which is up 52% after having been added September 4, 2009.  FCX is also up nicely, up 20%, having been added the same date at HL.


Disclosure:  Long HL

To be prepared is half the victory.  To be forewarned is to be forearmed.  Do not take lightly the warnings of a volatility reversal.  Two weeks ago, only one stock was added to the model portfolio, and I warned of a choppy market ahead, and a week later I warned of an impending volatility reversal, and a breakdown came two trading days later on Tuesday (see below).

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PERFECT WORLD, INC -- PWRD, Daily Chart




MICROSTRATEGY INC., MSTR, Daily Chart



Last week I implied there might be a choppy market ahead.   To illustrate this most graphically, I am posting a 30 minute line chart of the SPY (below).  Please pay attention this week to market conditions.  If there is continued weakness, a major market reversal in the form of a intermediate term, or even long term reversal could take place. 

Remarkably, the model portfolio held up very well last week, and in some cases the positions actually gained momentum (see SFSF).   In other cases, such as YONG (which experience about a 20% pullback) there was a volatility reversal, and yet maintaining gains.  Using YONG as an example, do NOT let a winner turn into a loser,if you can help it.  It’s up to you to do individual research on these companies.  Yahoo!  Finance is free, or you may have a subscription service that you prefer.



My purpose is not to go into any details about the fundamentals (financials) of the companies that are placed in the model portfolio.  In fact,  I don’t even tell you what they do.  This information is easily obtained, and my intention is to accomplish my purpose with as little writing as possible. 

There will be more writing (most weeks) about news that affects the 401k, and about the general philosophy of maximizing your 401k (or other retirement accounts).    Most “newsletter” writers like to write a lot of stuff.  I am doing things a little differently here.  The returns are taken very carefully, and if you read back in previous post you will see that the model portfolio is also a “market gauge.”  In fact, you can search this blog for the word “gauge” and you will find that very post!

Blog:  Maximize401k.wordpress.com

See the post from the beginning of the week about the choppiness expected this week.

Time Magazine Cover Validates My Blog’s Raison d’Etre – interesting excerpt below.


From Oct 19, 2009 Time Magazine

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The classic "hourglass" Bollinger Band pattern is present in many oil stocks.  BJS is one of the most boisterous with a solid uptrend.

Many of these oil service stocks have fantastic patterns:  WFT, HAL, SLB, BJS, PTEN, BHI, NBR, NOV, SII, HERO, RIG, NE, CAM, RDC, PDE, HLX, ESV, DO, MDR, PDS, FTI, GLBL, POWR, DRQ, ATW, PDS.


Here are Oil & Gas Operations stocks, most of which seem to have rather eccentric patterns, but nonetheless have surged on heavy volume, and in many cases broken out.  Here is a list of my favorites:  WNR, ATPG, KWK, TSO, WLL, GXMR, FST, KOG, PQ, ROYL, PXD, HOC, VQ, SSN.

Disclosure:  WFT call options, Long HERO, VQ, SSN